YOU OFFERED ME £100,000: I’VE ACCEPTED £15,000- OH AND I WANT MY COSTS: THE DANGERS OF NOT NEGOTIATING AND WHY THE CLAIMANT HAD TO PAY INDEMNITY COSTS

I tried to summarise the judgment of Mr Justice Mann in Jordan -v- MGN Limited [2017] EWHC 1937 (Ch) and I found it  difficult. Every word of the judgment is important.  It shows, at least, a very insouciant, approach by the claimant to the making of serious offers of settlement. Then, when everything goes wrong, well it is all the defendant’s fault (naturally).  The  judgment serves  as  an object lesson on the  importance of making early Part 36 offers and the dangers, for a claimant, of not making sensible offers of settlement early in an action. (Read the judgment to the end, including the postcript).

“The bottom line is that Mr Jordan did not advance any explanation, let alone a good one, why, having run his case for 2½ years, having failed to respond properly to a number of offers, one of which was close to his own proposed financial settlement, having caused himself and the other side to run up significant amounts of costs, and having exposed the defendant to the prospect of having to pay the CFA uplift and ATE premiums (which I am satisfied is a powerful threat to a defendant), should at the last minute do the equivalent of walking away from the action. I consider that all those factors, and the other matters referred to in this section, are good reasons for ruling that the costs be paid on the indemnity basis, and I so order.”

There was therefore, in my view, a culpable failure to engage in negotiations which would, if conducted more properly, have been likely to have led to a settlement. That is very significant matter.”

KEY POINTS

  • The claimant accepted a Part 36 offer of £15,000 that had been made in 2014.
  • The defendant had made later, higher, offers including an offer of £100,000 at a settlement meeting.
  • The claimant accepted the offer of £15,000 shortly before trial.
  • The claimant had not shown any reason why he should not pay the defendant’s costs after the date of expiry of the Part 36 offer (except that on the facts of this case a defendant’s undertaking as to costs meant that the costs started from a later date.
  • The claimant’s conduct was such as to attract indemnity costs. The claimant had failed to make any sensible offer until shortly before the trial, after considerable costs had been incurred.

THE JUDGMENT

    1. The application which I have to decide is one which was made on the eve of an intended trial in which Mr Jordan, a well-known person in Formula 1 circles, sought remedies in respect of phone hacking and other unlawful activities said to have been carried out by the defendant’s newspapers, some of which are alleged to have resulted in the publication of articles based on or containing private information gathered unlawfully. The matter was due for trial, along with 3 other cases, in the week commencing 3rd July 2017, and the actual first hearing day was eventually fixed for Wednesday 5th July. However, at the end of the preceding afternoon, in circumstances set out below, the claimant made the present application which sought to bring the action to an end by a determination that the defendant’s conduct had become abusive of the process, or a determination that there was or could be a valid compromise, or that the claimant was entitled to accept, and did accept, a very old Part 36 offer. Since it became plain that a trial would be unnecessary the actual trial date was vacated and arrangements were made for the hearing of this application.
    2. I am the managing judge for a large raft of similar cases; all those cases are managed by me to trial, and I conduct any trials. Accordingly, the application was made to me.
    3. The short background to it is as follows. The action was started by a claim form issued on 12th August 2014. During the course of its progress to trial there were a number of Part 36 offers and a number of Without Prejudice Save As To Costs (“WPSAC”) offers. The first was a Part 36 offer on 24th September 2014. 2016 saw a number of WPSAC offers by the defendant, none of which were accepted, or indeed responded to as such, by the claimant. There was a particular flurry of settlement activity over the period leading up to the trial in this year, and particularly over the preceding weekend. Based on that activity, at the very last minute (almost literally) the claimant sought to say that there has been agreement on everything other than costs, and that it would be an abuse to allow the proceedings to go on; alternatively, that there was a binding agreement. In support of that case counsel put before me all the Part 36 offers and WPSAC material notwithstanding that the case had technically not yet come to an end. If those argument failed then the claimant accepted a very historic Part 36 offer which was still open.
    4. The application notice taking these points (dated 4th July 2017) sought the following relief:
“(a) Judgment be entered in the Claimant’s favour for £90,000, with the incidence and amount of costs to be determined by the Managing Judge, on the basis that the figure for compensation is agreed, and in the circumstances it would be an abuse of the Court’s process for the Defendant to insist that the claim proceed to a lengthy and costly trial.
(b) Alternatively, a declaration that the Claimant is entitled to accept the Defendant’s Without Prejudice Save as to Costs offer of £90,000 compensation plus £90,000 in costs made on 30 June 2017.
(c) In the further alternative, a declaration that the Claimant is entitled to accept, and has accepted, the Defendant’s Part 36 Offer of 9 June 2017, and that the Defendant pay Claimant’s costs to date.
(d) In the further alternative, a declaration that he Claimant is entitled to accept, and has accepted, the Defendant’s Part 36 Offer of 24 September 2014, and that the Defendant pay be Claimant’s costs to date.”
    1. The scope of the application dwindled over the course of its short life and the points put before me by Mr Simon Browne QC, who appeared for the claimant, were much more limited than the application made by the application notice. He had abandoned point (c) in his skeleton argument served 6 days before I heard the application, and when he advanced the case before me he abandoned all the others except those arising out of point (d). He no longer sought to have a judgment of £90,000 in his client’s favour. He made an application solely on the footing that his client had accepted the September 2014 Part 36 offer. His application was that he should not have to pay the costs after the Relevant Period relating to that offer, and indeed his clients should have the costs. Alternatively, if his client was obliged to pay the costs then he resisted the claim of the defendant that they should be paid on the indemnity basis.
    2. His submissions that he should have his costs for the period after the initial acceptance is a striking one, based (as was his resistance to paying indemnity costs) on submissions which were similar to those which would have been advanced under the abuse paragraph (paragraph (a)) of the application notice. In order to resolve the issues it is necessary to set out a large amount of detail relating to the Part 36 and WPSAC dealings in this case, in the context of the key steps in this action.
The history of the action and of the negotiations for settlement
    1. In the narrative that follows Hamlins were and are the solicitors to the claimant and RPC were and are solicitors to the defendant.
    2. As appears above, the claim form was issued on 12th August 2014 specifying the value of the claim at £100,000. Particulars of Claim followed on 12th September 2014, relying on a pattern of phone hacking across a period and on 5 specific newspaper articles said to have derived from unlawful information gathering. This valuation of the claim at £100,000 in the claim form acquires some significance in the light of subsequent events.
    3. Mr Jordan, like all or practically all of the claimants in the phone-hacking litigation, has instructed his lawyers on the basis of a conditional fee agreement (“CFA”). He has also had the benefit of ATE insurance to cover adverse costs (and, I think, disbursements). The premium under that policy accrued in instalments, the last of which was due shortly before the trial.
    4. The action joined a growing cohort of similar claims which are all managed to trial by me as managing judge. There have been many dozens of such claims and most have settled at various stages prior to a trial. Every so often a batch of unsettled cases was selected for trial, and as their trials approached most of them settled. This has become a familiar pattern. The cohort of cases has been managed at a series of Case Management Conferences. Eventually Mr Jordan’s case emerged as one of a batch of cases headed for trial in the week starting 3rd July 2017.
    5. I revert to the history. Not long after the Particulars of Claim, on 24th September 2014, RPC made a Part 36 offer. The letter is also headed “Without Prejudice Save as to Costs” but all parties have treated the letter as a proper Part 36 offer. It sets out all the usual consequences of acceptance and a failure to accept it. It explained why it was not possible to accede to some of the claims in the Particulars of Claim for reasons which do not matter, and then made an offer of damages of £15,000 and offered an undertaking not to intercept voicemail messages or to re-publish the articles complained of in the action (then numbering 5). In a letter headed “Without Prejudice Save as to Costs” dated 14th October 2014 Hamlins stated that their client was unable to accept MGN’s offer for short reasons given in that letter. This is the Part 36 offer which Mr Jordan has now decided to accept.
    6. On 31st December 2014 RPC made a further Part 36 offer in the same terms as the September offer save that the damages offer was increased to £20,000. That offer was not accepted.
    7. 2015 was devoid of settlement activity. On 21st May 2015 I delivered judgment in Gulati v MGN Ltd [2015] EWHC 1482 (Ch). This provided guidance for assessing damages in future cases.
    8. On 17th September 2015 MGN provided some early disclosure in accordance with a regime established for these cases. That would have assisted Mr Jordan in assessing the merits and strength of his claim, but was not all the disclosure to which he would be entitled in the action. The information comprised call data, invoices and articles written about him. On 10th November he served amended Particulars of Claim which increased the number of articles sued on from 5 to 26.
    9. The next piece of settlement activity was a further WPSAC offer by MGN on 15th January 2016. This letter offered damages of £45,000, contractual undertakings not to re-publish articles and not to intercept voicemail, a public apology by way of a Statement in Open Court, and payment of Mr Jordan’s reasonable costs up to the date of the acceptance of the offer. The last day for the acceptance of the offer was 28th January 2015. The letter ended by saying:
“If your client is prepared to accept the terms outlined in this offer on the condition that other remedies are provided by MGN please let us know what those remedies are.”
There was no apparent response to that letter.
    1. By a WPSAC letter dated 24th February 2016 RPC offered damages of £30,000, contractual undertakings not to intercept voicemail messages, a public apology by way of a Statement in Open Court and costs up to the date of acceptance. This offer was expressed to be open until 3rd March 2016. There was no response to it.
    2. A letter from RPC dated 24th February 2016 contained both an admission and a form of offer of settlement. It contained clear admissions that MGN had indulged in the unlawful interception of Mr Jordan’s voicemail messages (and enclosed a Defence), and it contained an apology which would be repeated in a separate private letter. It went on to make an offer of the usual sort of ancillary matters (undertakings and the like) and an offer of damages to be agreed or assessed by the court, together with reasonable legal costs to be assessed.
    3. On 24th March 2016 RPC made a WPSAC offer of £40,000 and similar ancillary matters, with a last date for acceptance of 4th April 2016. There was no response to that offer. In the light of that non-response RPC repeated it in a letter of 26th April 2016 with a last day for acceptance of 29thApril.
    4. By a letter dated 17th May 2016 RPC increased the offer that it had previously made to £60,000, with similar ancillary terms. This offer was open until 24th May 2016. There was no response.
    5. On 7th July 2016 there was apparently a without prejudice meeting; I have not been given any details of that.
    6. On 19th July 2016 RPC increased its previous offer to £80,000 with costs up to 7th July 2016 being the date of a rejected offer. There was no response to this £80,000 offer.
    7. On 26th August 2016 RPC wrote an open letter to Hamlins dealing with certain costs matters but also making a similar offer to that which had been made in July, offering £80,000 and certain ancillary relief. This offer was not accepted. An offer to settle at £80,000 was repeated in a further WPSAC offer dated 20th December save that the costs offered were only the costs up to and including 7th July 2016, being a date on which there was apparently a settlement meeting and both parties made offers to resolve the matter. It also contained an assurance about not claiming costs from 16th September 2016, an offer which relates to a previous arrangement about adverse costs to which I will refer later. Once again this offer was not responded to.
    8. Things then apparently went quiet on the negotiation front (at least on the open and WPSAC fronts) until 18th April 2017 when Hamlins at last responded on a WPSAC/Part 36 basis. On 18th April 2017 Hamlins wrote making what was in essence a Part 36 offer at £90,000, proposing that MGN should provide an undertaking not to intercept voicemail messages, a private letter of apology and a Statement in Open Court. There was apparently no response to this from RPC until 9th June 2017 when that firm responded in a WPSAC letter. The letter annexed a chronology of the correspondence and emphasised the previous offers of £80,000 which had not been responded to. This is an important letter, and it complains as follows:
“Had you approached us in July 2016 with the proposal that you have made, for the very first time, in April this year, this case would, as you know, have been settled on 7 July 2016. But instead of negotiating, your client has sat on his hands until late in the day ….
The costs that have been incurred on each side since MGN made its offer on 19 July 2016 will outweigh the £10,000 difference between us in damages many times over. It follows that by waiting until now to make your offer, the real issue between our client is not damages but costs.
If your client had engaged with us properly in WPSAC correspondence, as a normally funded litigant would have, extensive costs would have been avoided. It would appear that if your client did not have the benefit of a CFA and ATE insurance, he would have taken a more sensible and proportionate approach to settlement…
… it appears your client expects MGN to bear its costs as well as his costs for the entirety of this litigation to date. This seems to us to be little short of outrageous when your client could have secured a settlement along the lines of what he is now seeking to achieve in July 2016 if he had only engaged in constructive negotiation.
Our client remains just as willing to settle this claim as it always has been. It does not wish to go to trial when there is only £10,000 between the parties on damages. MGN does not view this claim as being worth £90,000 or anything close to that figure but, as it has always been, MGN is willing to approach settlement negotiations commercially with an eye to the costs being incurred in this litigation on both sides.”
The letter then counter-offers damages of £90,000, to pay Mr Jordan’s costs up to 7th July 2016, to pay Common Costs up to the end of the period for which there was liability assuming a settlement in July 2016 (i.e. 15th September 2016), that Mr Jordan should pay MGN’s costs since 16thSeptember 2016 on the indemnity basis (offering the option that I should be asked to decide whether the basis should be standard or indemnity), an undertaking to the court not to intercept voicemails, the provision of a letter of apology in terms to be agreed, and participation in a joint statement in open court. For the first time it was proposed that Mr Jordan should provide private letters to each of the journalists who had provided witness statements for MGN in the action, withdrawing allegations that Mr Jordan had made that those journalists had been involved in illegal activities. The offer was said to be open for acceptance until 9.30 am on Monday 12th June, because a proportion of counsel’s brief fees would be incurred at 10 am on that date.
    1. On the same date Hamlins sent a letter to RPC proposing a without prejudice meeting; it seems from the terms of that letter that it was responding to a letter which I have not been allowed to see, but it plainly proposes a meeting at which all 8 outstanding cases which were then candidates for trial in July 2017 would be up for settlement discussion. The actual response to RPC’s letter of 9th June came in a WPSAC letter from Hamlins dated 14th June. This letter was headed in the matter of Mr Jordan’s claim and in that of a Mr Rider (whose case subsequently settled shortly before the trial was due to start). There had apparently been a similar letter in Mr Rider’s case to that which was sent for Mr Jordan. Hamlins stated that the proposals that RPC had made about costs meant that their clients “will not and cannot – as you will know – be accepted by these claimants.” It went on:
“Your client’s offers serve only to encourage the claimants to take their claims to Trial in under 3 weeks time. Acceptance would result in a position where our clients were, in all likelihood, left without compensation for the wrongdoing of your client.”
    1. The letter went on to refer back to the Part 36 offers which Hamlins had made and stating how unfortunate it was that, rather than accepting those offers, RPC had used a genuine settlement attempt to respond in a “tactical manner”. The letter then went on to complain about the introduction of the substance of without prejudice discussions and meetings and saying:
“You are required either to re-send your letters taking out the substance of WP discussions, or to re-send with all such material redacted. We confirm that we will not allow your letters as formulated to be included in any correspondence shown to the court at any stage.”
It would seem that Hamlins have changed their mind about these strong views because that letter was placed before me in an exhibit to a Witness Statement of Mr Christopher Hutchings, a partner in Hamlins, provided to support the applications which I now have to decide. The climb-down from such forensic indignation is unattractive. The letter goes on to record a further WPSAC letter which apparently declined Hamlins’ proposal to discuss the claims at a without prejudice meeting on 19th June. RPC responded to that last point by a letter of 13th June proposing that the meeting should be on a WPSAC basis rather than a without prejudice basis. I do not think that anything turns on that particular piece of the dispute. It would seem that in any event a without prejudice meeting took place on the 22nd June. I do not know what happened at that meeting.
    1. On 19th June Hamlins sought MGN’s consent to an amendment of the claim form to increase the stated value of the claim from £100,000 to £150,000. In due course this consent was granted and the amendment made, and the approach to the trial took place against this upwards amendment of the claim. This makes all the more striking Mr Jordan’s ultimate decision to accept the historic £15,000 offer.
    2. There was then some further correspondence which did not really progress this matter towards settlement while each side complained to the other about a failure to engage in order to avoid a trial. On 30th June 2017 Hamlins wrote a WPSAC letter, written in the light of a decision by me to allow Mr Jordan to adduce certain further evidence and referring to a concession made by MGN as to whether or not phone hacking occurred in the sports department of the newspapers (it conceded that it did). The letter goes on:
“With all this in mind, and the emphasis that was repeatedly stressed by your own Counsel on the need for “proportionality”, we feel it is only right to point out once again that your client’s position is wholly unreasonable in circumstances where your client has come up to our client’s figures in terms of the damages which they seek. The fact that your offer is expressed to be conditional on a different outcome as to the costs as from a certain date does not change the fundamental position. It is one which we also think the court, if it was aware, would regard as disproportionate (not to mention unreasonable) in the context of a lengthy and costly trial. We do not understand how you can continue now to state that your reason for proceeding is somehow to protect your journalists, given the concession that your client has now been forced to accept, not to mention the position which those coming to give evidence face.
In view of the start of trial next Wednesday, we invite your client to reconsider its position on costs. We are confident that our proposal is the correct one, as we are that Mr Justice Mann will agree with us. We hope that your client will now see the sense in accepting our offer before what will on any view be a very public and damaging fight next week. However, if you disagree with it and believe you are right about the costs position, then we are more than happy, given our confidence about it and the Judge’s repeated interest in scrutinising the parties’ attempts at settlement, if you wish to have Mr Justice Mann (or a Costs Judge) assess the costs on the basis of the compensation figure which has now been reached.
We put you on notice that, at the end of the trial, we will draw the court’s attention to this correspondence, and the fact that we offered you this entirely reasonable opportunity to resolve these claims without a costly trial.”
At this point, therefore, Hamlins were taking the stance that everything had been agreed except costs. Mr Jordan was seeking his costs, and the stance of RPC on behalf of MGN was that he would have his costs up to the preceding September, but would have to pay the costs thereafter. The 30th June was a Friday and this impasse survived a further bout of offers and negotiating which occurred over the weekend which followed.
    1. On the same day Hamlins wrote a WPSAC letter responding to a request from RPC for a breakdown of costs as between three of the then outstanding four cases, including Mr Jordan’s. The figures for Mr Jordan’s case showed base solicitors’ costs of £150,000 and counsel’s fees of £81,000. Again on the same day RPC wrote a further WPSAC letter which I need to set out because it forms one of the points around which the claimants’ case revolves on this application. So far as relevant the letter reads as follows (or contains the following material):
“Eddie Jordan v MGN Ltd
We refer to your letter of today’s date. As is evident from your letter, such dispute as remains between the parties is essentially about costs. Had your client not chosen to instruct your firm on a CFA with ATE, such that he had a real personal financial stake in the outcome, he would no doubt have conducted the litigation and in particular the settlement negotiations in a more proportionate manner.
It is obvious that your client has no desire to go to trial – and, if it were not for costs, he would have no need to do so.”
The letter goes on to state what RPC saw as the risks to Mr Jordan and it asserted that he had misrepresented and exaggerated his case in a deliberate and culpable manner. It went on to say:
“Nevertheless, MGN too wishes to avoid a trial (though not for the reasons you state in your letter). In a last-ditch attempt to get a settlement it makes the following offer in full and final settlement of any and all claims your client has or may have against MGN for voicemail interception and other unlawful information-gathering:
1. £90,000 by way of damages; and
2. A sum of £90,000 plus VAT for your client’s costs up to 7 July 2016 (including Common Costs).
MGN will agree not to recover any of its costs from your client.
This offer is open until 5 pm on Monday 3 July 2017.”
It goes on to observe that non-monetary remedies were not offered, because MGN did not consider that the absence of such remedies was holding up settlement.
“As we have said above, the block to settlement is costs. If, however, the above offer is otherwise acceptable to your client but he insists on some form of non-monetary remedy, MGN will consider what he may have to say and would not rule out the provision of such remedies as may be appropriate.
Please also note that we consider the damages figure we have offered to be distinctly on the high side for this claim having regard to its merits, but the sum is being offered in order to achieve a settlement.”
    1. That letter was responded to by Hamlins on 1st July 2017 who made offers in relation to Mr Jordan’s case and 2 others (both of which settled, as will appear). It opens by making various remarks about their previous willingness to settle as was said to have been made clear “on numerous occasions on a without prejudice basis”. It goes on:
“Your client’s offers are rejected. The proposal on costs is simply unrealistic. The recent offer to pay our clients the sums by way of damages which we have previously proposed in this chain of correspondence would, as we have stated, be acceptable but for your client’s failure to agree the usual order that costs follow the event.”
The letter goes on to propose an alternative – £90,000 damages, and £173,250 for costs, disbursements and VAT. Other terms and damages are proposed in relation to two other actions. MGN would be required to pay disbursements of £28,000 odd spread across three cases, and £45,315 by way of ATE premiums for each of the three cases. They stated that the ATE provider had been asked to put off putting additional cover for the trial in place (which would have required an extra premium) until 9 am on Monday 3rd July. This offer was said to remain open for acceptance until 4 pm on Sunday 2nd July.
    1. A certain degree of clarification was discussed and offered over the weekend; the details do not matter. On 2nd July at 22.44 Hamlins complained to RPC:
“We made it clear that our offers were to be considered together as a package. The position your client is taking on Eddie Jordan’s claim, considering in particular failure [sic] to make a proposal regarding ATE and Common Costs, makes it impossible for us to resolve these claims and your offers are not accepted. This is an inevitable consequence of your client’s unreasonable stance at this late stage in negotiations.
We will proceed, necessarily, and see you tomorrow at court.”
    1. Over the course of that Sunday (2nd July) there were various WPSAC negotiations which did not resolve Mr Jordan’s claim. I do not know the details of those negotiations and nobody has sought to put the detail before me. Apparently on Monday 3rd July, in the late morning, Hamlins put forward a further offer which was rejected by MGN in an email timed at 13.34. That having happened, in an email of 3rd July timed at 13.47 Mr Hutchings, for Hamlins, sought to accept the offer contained in the letter of 30th June. It took only 13 minutes for Mr Mathieson of RPC to point out that that offer had been rejected and was no longer capable of acceptance. That was obviously right.
    2. Hamlins’ response to that on 3rd July was a letter which pointed out that it was unreasonable for MGN to continue to proceed to trial when Mr Jordan had accepted the last terms offered by MGN. The letter pointed out the time and costs on both sides that would be risked if that offer could not be accepted. The letter stated that if MGN did not back down by 5 pm Hamlins would seek to “go before Mr Justice Mann and inform the judge that you have made an offer which we have accepted within the time frame stated.” That is a somewhat extraordinary position bearing in mind that the offer had been rejected in the clearest possible terms, and that all the dealings were on a WPSAC basis (which would have made it highly undesirable to put the matter before me as the trial judge).
    3. Mr Mathieson responded to that letter in an email timed at 16.44, which pointed out that the correspondence was WPSAC and there was no proper basis for referring me to it. Importantly, it went on to say:
“In the meantime, MGN’s Part 36 offer of 24 September 2014 remains open for acceptance, though that will not necessarily continue to be the position. For the avoidance of doubt, acceptance of that offer – out of time – would be permitted by MGN on the basis that your client pays MGN’s costs from the end of the Relevant Period (15 October 2014) to the point of acceptance pursuant to CPR 36×10(5)(b) as applicable to Part 36 offers made before 6 April 2015). This would be on the basis that MGN’s costs would be assessed if not agreed on the standard basis even though MGN has very good arguments that acceptance of that Part 36 offer at this stage should lead to its costs being paid/assessed on the indemnity basis. Had your client engaged constructively in settlement, and accepted MGN’s reasonable offers instead of overstating his case, this claim would have settled a long time ago at a fraction of the cost. Having regard to that, we are entirely unmoved by your now urging MGN to take a “reasonable, sensible and proportionate settlement” when that is precisely what you and your client have consistently failed to do.”
    1. By a further email timed at 17.24 RPC withdrew the Part 36 offer dated 31st December 2014.
    2. Those are the events relevant to settlement proposals. It is now necessary to describe the events leading up to the (intended) start of the trial and the making of the present application. The window for the trial had been set as opening on Monday 3rd July 2017. At least one day was scheduled for pre-reading. There was some uncertainty as to whether I would take one or two – in the end I decided to take two. On the morning of Monday 3rdJuly there was a short hearing to deal with certain outstanding trial timetabling matters (including confirming the commencement date). One of the things that had to be decided was how long Mr Sherborne should be allowed to open, and another important matter was when Mr Jordan would attend to give his evidence. By this time one of the four cases intended for trial had just settled (the preceding evening). Three cases were apparently still live. There was a difficulty with Mr Jordan in that the date on which he proposed to give evidence was the one day in the whole trial period when Mr Spearman (who was to lead for MGN at the trial) would not be available to cross-examine him, because of an urgently fixed hearing in the Supreme Court. Clarification was to be sought as to whether Mr Jordan could attend the previous day or the day afterwards. He claimed to have a busy schedule of contractual engagements. Of course, nothing was said about the WPSAC negotiations. No complaint can be made about that. However, what can be observed is that Mr Jordan’s counsel gave every impression that Mr Jordan was going to be attending to give evidence at the trial in the middle of the following week.
    3. The outstanding matters were largely dealt with by the end of that hearing, including a clear ruling from me that the hearing would not actually start until the Wednesday (5th July). Mr Jordan’s position was largely resolved; what was awaited was his confirmation that he would in fact be able to attend on the day before or the day after his previously planned attendance date. Approximately an hour after I got back to my room I received a message saying that two of the three remaining cases had settled, leaving only Mr Jordan’s case. That required a further reconsideration of the trial timetable since large chunks of the time allotted in the previous timetable would no longer be required. I communicated to the parties that they should agree a revised timetable and that I would resolve any disputes about it the next day. I also suggested that the start of the trial could be put back to the following Monday (10th July). No such agreement was reached so I sat at 2.30 the following day (Tuesday) to determine the timetable. What had to be decided was whether the trial would still start on the proposed date (the Wednesday), with considerable acceleration of all the witnesses relevant to Mr Jordan’s parts of the case, or whether it should start at the beginning of the following week, which would leave the Jordan-related timetable largely intact but with some witnesses adjusted in their dates. Mr Sherborne, for Mr Jordan, proposed the latter course; somewhat opportunistically and unattractively, in my view, the defendant proposed that I should start on the following day (Wednesday), complaining that it had not been told of Mr Jordan’s availability that week. I ruled that the trial would start the following Monday.
    4. Before that ruling was given, Mr Sherborne intimated that an application would be made by him by the end of the day relating in some way to the conduct of MGN and the future of the action. After the ruling he returned to the point. He said that the application would potentially dispose of the action and it would need to be dealt with before the actual trial started. He said that the application, which had at that point (early afternoon) not yet been issued could either be made by him the following day (the Wednesday) but he anticipated that when the defendant saw it it would want to put in evidence and it would therefore be convenient to deal with it the following Monday, when the defendant would have had time to consider it and put in evidence. I asked him squarely, and more than once, what the nature of the application was, and Mr Sherborne declined to give any indication whatsoever, even though he said it would be issued by the end of the afternoon. He indicated that I would understand why he was taking that view when I saw the application. He was told by me that I would want to have a copy of the application and supporting documents emailed to me as soon as they were issued so I could see what all the mystery was about and, if necessary, work out what to do about it. (There is a dispute between the parties as to the extent to which Mr Sherborne developed his description before I ruled on the starting date as opposed to afterwards. No transcript is available and my recollection is not clear. But the dispute does not matter for the purposes of this judgment.)
    5. In due course, at the end of the afternoon, the material was emailed to me. That material comprised the present application notice and a witness statement from Mr Hutchings of Hamlins which referred briefly to the history of the matter and exhibited practically all of the Part 36 and WPSAC material which I have referred to above. I confess that my initial reaction was one of considerable surprise at being put in possession of such material when I was to be the trial judge. However, further consideration revealed Mr Jordan’s fallback position of accepting the September 2014 Part 36 offer. That meant that, as it seemed to me, there could never be a trial. The following day both parties confirmed to me that that was the case. In those circumstances I directed that the trial date be vacated and gave directions for the exchange of further evidence and skeleton arguments so that the application could be resolved.
The terms of Part 36
    1. As appears above, shortly after the start of the opening of the application to me by Mr Browne all elements other than the Part 36 offer element had fallen away. (I say “shortly after the start of the opening” because Mr Browne only confirmed the abandonment of the abuse point during the course of my trying to understand what the application was really about and when he had turned to take instructions on the point.) The claimant was to be taken to have accepted the Part 36 offer made in September 2014 (as the defendant accepted) so the debate was focused on the costs consequences of that acceptance.
    2. Since the offer predated 6th April 2015 the costs consequences of acceptance are governed by a former version of CPR 36.10(4) and (5). They read:
“36.10(4) Where – …
(b) A Part 36 offer is accepted after expiry of the relevant period,
if the parties do not agree the liability for costs, the court will make an order as to costs.
(5) Where paragraph 4(b) applies, unless the court orders otherwise –
(a) the claimant will be entitled to the costs of the proceedings up to the date on which the relevant period expired; and
(b) the offeree will be liable for the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.”
    1. The September 2014 offer was obviously accepted long after the relevant period had expired (it expired on 14 October 2014), so one applies those provisions to the costs question. Under the case law applying to that provision it was held:
“the court had to make the normal order unless it considered it unjust to do so and in deciding whether it was unjust, it had to take into account all the circumstances of the case including the four matters expressly set out in Rule 36.14(4)” (SG v Hewitt [2013] 1 All ER 1118.
The four matters provided for by CPR 36.14 were:
“(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made; and
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.”
(The present form of the rules now expressly builds in the “unjust” factor – see CPR 36.13(5).)
    1. Whether the court should make a different order from that prima facie provided by the rule was governed by the justice or injustice arising from one order or the other.
    2. In Smith v Trafford Housing [2012] EWHC 3320 (Ch) Briggs J expressed some views about the application of the “unjust” test in the context of considering the case of a claimant who had failed to beat a Part 36 offer. It was not disputed in this case that what he said was capable of being applied to the situation of late acceptance. He said:
“a) The question is not whether it was reasonable for the claimant to refuse the offer. Rather, the question is whether, having regard to all the circumstances and looking at the matter as it affects both parties, an order that the claimant should pay the costs would be unjust: see Matthews v Metal Improvements Co. Inc [2007] EWCA Civ 215, per Stanley Burnton J (sitting as an additional judge of the Court of Appeal) at paragraph 32.
b) Each case will turn on its own circumstances, but the court should be trying to assess “who in reality is the unsuccessful party and who has been responsible for the fact that costs have been incurred which should not have been.”: see Factortame v Secretary of State[2002] EWCA Civ 22, per Walker LJ at paragraph 27.
c) The court is not constrained by the list of potentially relevant factors in Part 36.14(4) to have regard only to the circumstances of the making of the offer or the provision or otherwise of relevant information in relation to it. There is no limit to the types of circumstances which may, in a particular case, make it unjust that the ordinary consequences set out in Part 36.14 should follow: see Lilleyman v Lilleyman (judgment on costs) [2012] EWHC 1056 (Ch) at paragraph 16.
d) Nonetheless, the court does not have an unfettered discretion to depart from the ordinary cost consequences set out in Part 36.14. The burden on a claimant who has failed to beat the defendant’s Part 36 offer to show injustice is a formidable obstacle to the obtaining of a different costs order. If that were not so, then the salutary purpose of Part 36, in promoting compromise and the avoidance of unnecessary expenditure of costs and court time, would be undermined.”
    1. The first issue on this application was therefore whether it would be just to depart from that normal order as to costs from the date of the expiry of the relevant period. There was, however, a slight tweak on the facts of this case which affects the normal operation of the rule. At an early stage in this litigation, on the 12 December 2014, the defendant offered to all or most phone hacking claimants (including Mr Jordan) an undertaking that it would not seek to recover costs from any claimant until after 21 days had elapsed from notice being given by MGN that it would reserve the right to seek costs from that claimant. This offer, as the letter shows, was intended by MGN to demonstrate that claimants did not need to take out ATE insurance from the outset. The letter reserved the right of MGN to rely on it in order to support a submission that any ATE insurance premium was unnecessarily incurred. I do not understand that it dissuaded any claimant from taking out an ATE policy and incurring premiums from the beginning of the claim, but that does not matter for present purposes. What matters is that it was an undertaking outstanding for some of the period covered by the costs which I have to decide. MGN gave notice in accordance with that letter on 26 August 2016, with the effect that it could not claim any adverse costs incurred before 15 September 2016. Mr Spearman did not seek to resile from that undertaking, with the effect that the automatic provisions of CPR 36.10, giving him his costs from October 2014, could only cover the costs incurred from 15 September 2016. In the discussion that follows it should be understood that those are the defendant’s costs which are in issue, but for ease of exposition I will treat the relevant costs as those incurred from the expiry of the relevant period in relation to the September 2014 Part 36 offer.
The claimant’s case for resisting the normal order and claiming costs for the period since the “relevant period”
    1. Mr Browne’s arguments for reversing the normal effect of CPR 36.10 (judging by his skeleton argument, and the terms in which he addressed the point) were similar to his intended argument on the abuse point. They centred around the proposition that the negotiations demonstrated that the parties had obviously reached an agreement about damages at £90,000. Ancillary matters such as injunctions and apologies had never been in issue, even though MGN’s last offer did not expressly offer any ancillary relief (as opposed to indicating a willingness to talk about it). In the circumstances it was apparent that the only thing between the parties was the question of costs, and in particular whether Mr Jordan should have to pay MGN’s costs from July or September 2016. In the circumstances of that, and of the rest of the correspondence to which I have referred, it would have been quite wrong and an abuse of the process to use court resources and have a 4-5 day trial involving all matters in issue on the pleadings when in fact the dispute was (on the facts) just about costs. He relied on a line of cases which considered the position where parties had agreed on all matters of substance in a case except costs, or where the matters in issue had gone away for another reason, and all that was left was the question of costs. The over-riding objective required that; the need to deal with matters proportionately meant that a trial was inappropriate. What would have been proportionate would have been for the defendant to accept that damages were agreed at £90,000, accept an award of that sum and agree that the court should determine the only outstanding issue of costs. To limit the proceedings in this was sensible and in accordance with dicta in Hanspaul v Ward [2016] EWHC 1358 (Ch)Jameel (Yousef) v Dow Jones & Co Inc [2005] QB 946 at para 69 was relied on as demonstrating that the court should not allow a party to pursue a pointless action; he submitted that it would be out of all proportion to have a trial where the damages were agreed. Mr Browne pointed to the familiar provisions of CPR 44, giving the court the familiar discretion over costs, and to the provisions of CPR 36.17(5) of the current form of CPR 36, even though strictly those provisions do not apply to the version of CPR 36 which applies to the 2014 Part 36 offer and there is no equivalent in that older version. All these factors were relied on as justifying departing from the normal order as to costs applying to the post-relevant period costs.
    2. There is at least one fundamental flaw in this line of argument. It is that it proceeds on the fallacy that the parties had agreed the amount of the damages in this case. They had done no such thing. They had made offers about damages, and that figure coincided in the offers, but the correspondence does not contain an agreement on £90,000 in any meaningful sense for these purposes. The correspondence shows offers which coincided in amount, but no agreement. Each side was putting forward £90,000 as a damages figure on which they would be prepared to settle as part of a package and as part of a trade. The claimant did not propose it as being the right sum in all circumstances, and I am sure that if the matter had gone to trial he would have been asking for a lot more. In its first proposal of the sum in RPC’s letter of 9th June 2017 the defendant proposed it as part of a package containing important further terms, including one requiring letters from Mr Jordan withdrawing his allegations against particular journalists, and some very important costs provisions which were roundly rejected. When it said, in RPC’s letter of 9th June 2017, that “the real issue between us is not damages but costs” (a sentence heavily relied on by Mr Browne), it was referring to the issue in the settlement negotiation, not in the action. The same letter makes it quite clear that MGN’s view of the merits of the claim was that it was worth far less than £90,000, and that that sum was being proffered merely because of the commercialities of the litigation. It is perfectly plain from that letter, and the later correspondence, that if the matter had proceeded to trial MGN would have been contending for a different sum. There is no meaningful sense in which the parties had “agreed” on £90,000 as being the damages figure appropriate to the claim.
    3. The same is true of the later letter of RPC (30th June 2017). In that letter RPC say:
“As is evident from your letter, such dispute as remains between the parties is essentially about costs.”
    1. This, again, was heavily relied on by Mr Browne. Again, the answer is the same. The dispute in the negotiation had come down to costs (though actually there had also been no agreement on the provision of letters to journalists). The dispute in terms of issues in the proceedings still included the quantum of damages. This is apparent from the tone of the letter, but is explicit in the last paragraph:
“Please note that we consider the damages figure we have offered to be distinctly on the high side for this claim having regard to its merits, but the sum is being offered in order to achieve a settlement.”
In other words, £90,000 was the right figure for a settlement which had other important elements; it was not right, and not agreed, for any other purposes.
    1. Accordingly, the fundamental basis of Mr Browne’s case falls away. The parties were not agreed on the damages figure. Had there been a trial it would not have been about costs; it would have been about the extent and value of liability as well (the defendants had admitted some hacking but not the full scope of the wrongs alleged by the claimant). The dispute had, in practical terms, come down to one about costs in the sense that it was the lack of an agreement on costs that was holding up agreement, but that does not make the continued defence of the action abusive, as suggested by Mr Browne. It means that the parties had not achieved the overall settlement which was required to bring the action to an end.
    2. The authorities relied on by Mr Browne do not assist him . Hanspaul v Ward was a case in which factual developments had removed all the issues from the action. The removal of trustees was sought; that had been provided for before trial. The removal of a protector was sought; he resigned late in the day. An issue over preference shares was resolved by agreement in the context of a preliminary issue. Thus by the time the matter came before Master Marsh on a CMC the only remaining effective issue in the proceedings was the costs. The dispute between the parties was as to how to resolve the question of costs. The claimant’s case was that there should be a trial at which it would be established who had been right or wrong even though that no longer mattered in terms of relief, and most of the defendants proposed a hearing to determine costs without a full trial of the merits (the others proposed a form of ADR). Mr Browne relied on an apparent willingness of the court in this case to deal with the matter by a hearing short of a full trial. At paragraph 27 Master Marsh, having considered cases where the parties had agreed all matters in such a way as to remove them from the court’s determination, except costs, said:
“27. It seems to me applying the principles to be derived from the overriding objective (as it has been amended) and the authorities to which I have referred, the court should try to establish an approach to resolving a dispute about costs which as far as possible minimises the necessity for the parties to incur further legal costs to enable a determination to be obtained. That said, the court must ensure, as far as possible, that the procedure which is adopted enables the issue of costs to be determined in a manner which is fair whilst incurring costs which are proportionate to what is at stake. To my mind, the spectre of further expenditure running to hundreds of thousands of pounds being incurred in this claim for the sole purpose of deciding who shall pay the costs incurred to date is a deeply unattractive one. It does not follow necessarily, of course, that the costs of the costs litigation will be awarded in the same way as the costs incurred to date as the future costs award may be affected by offers yet to be made and future conduct.”
    1. There is a key distinction between that case and this. In that case it was common ground (and irresistible) that there was nothing for the court to do in terms of relief. The relief sought had been dealt with by binding agreement or by events making a court determination otiose. It is like the preceding cases cited by the Master; they were cases in which events had rendered a trial pointless save to decide costs. The present case does not fall into that category. The parties had agreed nothing; the action was live as to all material issues. It is likely that the injunctive relief and defendant’s letter of apology would not have been in issue, but the scope of the unlawful conduct and the resulting damages would certainly have been live. The case is therefore nothing like that line of cases.
    2. Nor is Jameel v Dow Jones relevant. That was a case in which the case was theoretically live, but was struck out because the cost and effort of pursuing it was out of all proportion to what could be achieved – see paragraph 67. That is nothing like the present situation.
    3. That part of Mr Browne’s analysis therefore fails, and with it so does what remains of his application.
    4. In reaching this conclusion I have not found it necessary to be guided by what Briggs J said in Smith v Trafford Housing (above). The only part of what he said that might be of assistance in these circumstances is his indication that the court should consider “who in reality is the unsuccessful party and who has been responsible for the fact that costs have been incurred which should not have been.” That test cannot be properly applied in its own terms where one is not comparing an actual result with a Part 36 offer, because in the absence of a trial or a binding agreement one cannot really determine who has been the successful party. However, that way of viewing the matter is based on the assumption that the purpose behind the normal rule is to give effect to an assumption that if a party comes back and accepts an offer which could have been accepted before, that party must be taken to be responsible for the intervening costs which have turned out to be unnecessarily incurred. If one asks who has been responsible for incurring unnecessary costs then the answer, in my view, is plainly Mr Jordan, once he has accepted the Part 36 offer. He has accepted an offer which is very much less than the range of subsequent offers that were made on terms which were comparable in relation to non-monetary relief. He could have had as much as £80,000 instead of the £15,000. After incurring very large amounts of costs he decided to go back and accept the earlier and much lower sum. Nothing had happened which would have made MGN responsible for the incurring of costs which had accrued in the period after its Part 36 offer. It is not as though (for example) late in the day MGN disclosed something which it ought to have disclosed before, which was unknown to and unanticipated by Mr Jordan and which demonstrated after all that his case was worth only £15,000. Nothing like that happened. What happened is that Mr Jordan decided, for his own reasons (which are considered below in connection with the indemnity costs point) not to take the action to trial. He was responsible for all the costs, which turn out to be wasted since he originally failed to accept the Part 36 offer.
    5. Another difficulty faces Mr Browne. Even if he were right in saying that there was a consensus as to what the damages was, albeit not binding (he did not suggest that there was any binding agreement at all once he had abandoned paragraphs (b) and (c) of his application) then it is not apparent why that level of agreement should somehow make it right that his client should not have to suffer the normal costs consequences of the late acceptance of the old Part 36 offer. Mr Browne simply failed to make a case for saying that (on this hypothesis) his client’s decision not to pursue the claim to trial to test the claim (and perhaps do better than £90,000), and pursue his costs claim, should render reasonable his decision to accept a much lower sum, which he could have accepted 2½ years previously, and not to have to pay the costs of the intervening period, much less recover his own.
    6. In my view Mr Browne has not even begun to make a case for departing from the usual order. The usual order is amply justified in this case. That conclusion is reinforced by what I find below in relation to indemnity costs. The claimant has been responsible for prolonging litigation for a considerable period and then (basically) caving in. The just result is that the normal consequences of the late acceptance of a Part 36 offer should follow.
    7. In the light of the demise of Mr Browne’s case on the footing that there is no relevant agreement, and in the light of his abandonment of his ground (a), I do not need to make a formal finding as to whether his abuse-based application could ever have succeeded. However, I nonetheless express the view that it would have faced impossible difficulties even if there had been a greater degree of consensus about the damages point as an appropriate figure for damages in any event. Unless it had been agreed in a binding fashion it would still have been a figure in WPSAC correspondence. The circumstances in which such correspondence can be put before a court before the costs stage of a trial are limited. The whole point (or one of the main points) of negotiating behind that curtain is that neither party can put the material before the court for the purposes of establishing liability in a trial on the issues. It is obvious that the correspondence cannot be put before the trial court for that purpose. Nor, in my view, can it be put before the court to demonstrate that continuation of the action would be an abuse. That would be doing the same thing as deploying it at a trial. The party would be seeking to rely on the material to establish as justifying a finding of liability (or the absence of liability in the case of a defendant) and thus get a judgment. I am afraid I cannot see how that is consistent with the nature of WPSAC correspondence, and Mr Browne showed me no authority to suggest it was. The position is, of course, different if the WPSAC negotiations give rise to a binding agreement, but that was not the case here, as Mr Browne accepted.
MGN’s case for indemnity costs
    1. MGN goes further than just relying on the normal provision as to costs since the expiry of the relevant period in October 2014 (or rather, on the facts of this case, from mid-September 2016, because of the undertaking it gave). It seeks that the costs that it would be entitled to under the rule be assessed on the indemnity, and not just on the standard, basis. There was no dispute as to the test to be applied – there is a wide discretion, but costs can be awarded on the indemnity basis where the court considers that the conduct of the paying party was unreasonable to a high degree which takes the situation away from the norm. Mr Spearman relies on two principal points as taking this case into indemnity costs territory – a culpable failure to engage properly in settlement negotiations, and the fact (alleged by MGN) that Mr Jordan can be seen to have been advancing a seriously exaggerated and fabricated claim. Mr Browne resisted the application on the footing that the facts were not bad enough. He did not resist it on the basis that Mr Mathieson had said that MGN would not insist on indemnity costs in his email of 16.44 on 3rd July.
    2. I will take Mr Spearman’s second point first. In order to make that point good Mr Spearman sought to point to material that was to be deployed in the action which he said plainly showed that Mr Jordan was relying on a large number of articles as containing private information (and therefore demonstrating and being the fruit of unlawful information gathering) because one could plainly see from other incontestable material that the allegedly private information had been put in the public domain before the offending article, and sometimes by Mr Jordan himself. He also pointed to the less than flattering findings about Mr Jordan made in Jordan Grand Prix Ltd v Vodafone Group plc [2003] EWHC 1956 (Comm). It was, he said (and I accept) likely that Mr Jordan would have that put to him in cross-examination. It was suggested that that was something he became anxious to avoid in this action (or indeed any action) because it would have supported an allegation of Mr Jordan’s propensity to exaggerate and fabricate.
    3. To have allowed this point to be run fully would have been to conduct a substantial part of the action but without a full deployment of all potentially relevant material. I declined to allow it to be done and invited Mr Spearman to take his best three instances to illustrate his point, so far as that might help him short of a finding in his favour. He did so. I will not recite the material here. It is sufficient to say that on the basis of what I was shown there is much to be said for Mr Spearman’s point – the articles do prima facie seem to have been preceded by publicly available information to the same effect, and that Mr Jordan was running a seriously exaggerated case on at least those articles. However, I do not make a finding to that effect. As will appear, Mr Spearman does not need it in any event.
    4. I turn therefore to Mr Spearman’s other main limb. The correspondence set out above speaks for itself. On a large number of occasions prior to April 2017 the defendant made offers with which the claimant simply failed to engage. They can be seen from the narrative appearing above. I have to be a little careful about that, because there was a without prejudice negotiation after the £60,000 offer and I do not know what happened on that occasion. I shall assume it was, to an unknown degree, an attempt to engage. (The defendant was content for me to see the without prejudice material, but the claimant was not.) But so far as the offers and negotiation known to me are concerned the claimant did not materially engage. He did not respond to the offers on a WPSAC basis which could be seen by the court in due course, and did not respond to the £80,000 offer at all.
    5. I have had occasion in the past to comment on this as a negotiating tactic. In Henson v MGN Limited (unreported, 7th March 2017), another case in the phone hacking managed litigation there was an analogous (but not so striking) failure to engage in a negotiating process when the same defendant made offers. In that case I said:
“It may be that inviting one’s opponent to make a series of offers without ever making on oneself after an initial stab (which is what happened in the correspondence which I have been allowed to see) is a clever tactical manoeuvre to extract ever higher offers, but there comes a point at which it does not facilitate settlement.”
    1. Since the Woolf reforms the court expects the parties behave reasonably and respond properly to offers of settlement. In OMV Petrom SA v Glencore International AG [2017] EWCA (Civ) the Court of Appeal had to consider the appropriate rate of interest on a claim where a claimant had beaten a Part 36 offer, and where it was found that the defendant had advanced a dishonest and unreasonable defence. In that context the The Chancellor of the High Court (Sir Geoffrey Vos) said:
“38. …  In some cases, a proportionate rate [of interest] will have to be greater than purely compensatory to provide the appropriate incentive to defendants to engage in reasonable settlement discussions and mediation aimed at achieving a compromise, to settle litigation at a reasonable level and at a reasonable time, and to mark the court’s disapproval of any unreasonable or improper conduct, as Briggs LJ put the matter, pour encourager les autres.
39. The culture of litigation has changed even since the Woolf reforms. Parties are no longer entitled to litigate forever simply because they can afford to do so. The rights of other court users must be taken into account. The parties are obliged to make reasonable efforts to settle, and to respond properly to Part 36 offers made by the other side. The regime of sanctions and rewards has been introduced to incentivise parties to behave reasonably, and if they do not, the court’s powers can be expected to be used to their disadvantage. The parties are obliged to conduct litigation collaboratively and to engage constructively in a settlement process.”
The actual decision is, of course, not directly applicable in this case, but the principles underlying paragraph 39 are.
    1. In my view the claimant has fallen short in that process. I leave out of account the early Part 36 offers. Not to respond to those at an early stage of the litigation is not so culpable. But the failure to start to engage when the 2016 offers started coming in and increasing is culpable. One would have thought that a client who was willing to consider settlement would have started to engage more at that point. I find it hard to believe that a normal paying client, who was not litigating under a CFA and with the protection of ATE insurance, would have adopted the tactic of not responding and not engaging further. I remind myself that I know that there were without prejudice negotiations at this time, and that may have amounted to a degree of engagement, but I have not been told what it was. But in any event there was no response to the £80,000 offer. Recent events tell us that such a response would probably have been fruitful in getting a settlement.
    2. This degree of lack of engagement would probably not, of itself, have justified indemnity costs. It is the addition of what happened towards the end of the process which does. In April 2017 the claimant made his £90,000 offer. The defendant responded (admittedly after a delay) that if that had been offered back in July 2009 the proceedings could have been brought to an end. On the evidence I have seen I think that that is likely. I was not made aware of anything that happened in the litigation which would have caused the claimant to lower his expectations from July 2016 such that a £90,000 became appropriate then when he would not have considered it appropriate earlier. No evidence has been provided which fills that gap. It is true that in the intervening period MGN had withdrawn a previously made admission about the unlawful genesis of the first 5 pleaded articles, and that witness statements had been exchanged, but there is no evidence that that led the claimant to lower his expectations in some way as to explain why he made a counter-offer of only £10,000 more than MGN’s last offer. No such explanation appears either in the correspondence or in the witness statements which have been exchanged in connection with this application. MGN’s own £90,000, plus costs, with the qualification as to costs since July or September 2016, was predicated on the assumption that £90,000 could have been offered in July 2016, and the fact that there was a late but unsuccessful attempt to accept such an offer would be at odds with any attempt to proffer such an explanation now.
    3. There was therefore, in my view, a culpable failure to engage in negotiations which would, if conducted more properly, have been likely to have led to a settlement. That is very significant matter.
    4. Also of significance are the circumstances of the end of the action. In my view Mr Jordan has demonstrated that at the end, for some undisclosed reason, he decided not to go to trial in an action which he had pursued until then and which he had given every impression of taking to trial up to that point so far as necessary. He had even amended his claim upwards by amending his claim form shortly before the trial date. Yet he effectively surrendered at the end for no good disclosed reason. It seems likely that he had decided, come what may, not to fight the claim by, at the latest, the preceding weekend of 1st/2nd July. He had tried to negotiate the defendant up during that weekend, and then when he failed he sought to accept an offer he had expressly rejected 2 days before. By Tuesday 2nd July his costs team (as it was described to me) were working on the application which was foreshadowed at the hearing on the Tuesday afternoon. I was told that the final form of the application had not been finalised when Mr Sherborne was addressing me (at 2.30pm), and in particular that the decision to accept the September 2014 Part 36 offer was not taken until 3.30pm. The application was made at 4.30, supported by a witness statement which had obviously taken a little time in the drafting, and whose drafting must have been well in train by 2.30 even if the part relating to the Part 36 application was added after the decision was taken at 3.30. I think it likely that Mr Jordan had decided not to fight the case before then, probably by the Monday morning, if not earlier. That means that Mr Jordan allowed his lawyers to attend court on two occasions to fix a timetable for a trial that he must have known was not going to happen, or at least was highly unlikely to happen. (I make it clear that I am not accusing the lawyers of impropriety.) His application was, in my view, an act of desperation. The attempts to allege that he had the right to accept two prior offers were always doomed to failure, and as Mr Spearman says it is surprising to see them advanced at all, and their abandonment reflects that inevitability. Although in the end Mr Browne did not advance it, his abuse argument was also doomed, and not only for the reasons that have prevented his being able to have the normal Part 36 costs rules varied in this case. I think it is likely to have foundered as an inappropriate use of Part 36 and WPSAC material – see above. It was only the last minute addition of the acceptance of the 2014 Part 36 offer which prevented it being a wholly inappropriate presentation to the trial judge of material which should never be seen by a trial judge until after the action has finished. The last piece of the jigsaw is Mr Jordan’s acceptance of the old Part 36 offer. That demonstrates most clearly that he had decided not to fight the action.
    5. I should elaborate on my finding that Mr Jordan has not explained satisfactorily why he took the course he did. His application was supported by a witness statement from his solicitor, Mr Hutchings. That witness statement sets out briefly part of the negotiation history, and exhibits the factual material relevant to paragraphs (a) to (c) of the application notice. It alleges an abuse, but does not, in that context, offer any explanation as to why Mr Jordan was not going to fight the action further. The acceptance of the Part 36 offer, which is expressed as a final alternative, is not explained at all either. Accordingly, no rationalisation is given there. Mr Mathieson of RPC put in a witness statement in response. At paragraph 6.15 he squarely raised the motivation of Mr Jordan, accusing him of “bailing out” when he appreciated the risk of exposure in the action, and not even doing the simple decent thing (as Mr Mathieson put it) of just accepting the Part 36 offer but instead asking his lawyers to concoct other ways of dealing with the action. A response to that paragraph would have been a logical place to respond by giving some indication of Mr Jordan’s motivation, but in his evidence in reply Mr Hutchings does not deal with that paragraph or provide any explanation elsewhere.
    6. At the opening of his submissions Mr Browne seemed to suggest that somehow MGN’s conduct had led to Mr Jordan’s acceptance of the Part 36 offer in the sense of being something which propelled Mr Jordan to an acceptance of the Part 36 offer. He said:
“12 The case is put today on the basis
13 that in reaching the stage that was reached, in light of the
14 overriding objective, the conduct of the defendant amounted to
15 an abuse of process and, if not an abuse of process, it was
16 conduct that led to the claimant, following that conduct, to
17 have to accept the Part 36 offer of September 2014.”
    1. When asked by me how that chain of causation worked he said that Mr Jordan was “forced” to accept the offer:
“20 MR. BROWNE: To save the deeply unattractive prospect of many days
21 of court time and many tens of thousands of pounds, for having
22 the whole matter tried when the issue between the parties
23 really was one as to costs.
(The word “forced” was my summary of what Mr Browne had just said, not Mr Browne’s own word, contrary to a suggestion of mine recorded later in the transcript.)
    1. When asked as to whom the prospect would be unattractive, bearing in mind that Mr Jordan had the benefit of a CFA agreement and an ATE policy, Mr Browne suggested that it would be unattractive to the court. It is, of course, true that a court would not necessarily find attractive the idea of hearing a case which was just about costs, but the court will do it if necessary, and in any event this was not such a case. The slightly half-hearted suggestion by Mr Browne that Mr Jordan had decided to protect the court from such a prospect by accepting an old, low offer with a heavy risk of an adverse costs order against him (albeit one from which he was protected financially by his ATE policy) seems to me to be absurd; and in any event Mr Jordan did not expressly say so in evidential form.
    2. The bottom line is that Mr Jordan did not advance any explanation, let alone a good one, why, having run his case for 2½ years, having failed to respond properly to a number of offers, one of which was close to his own proposed financial settlement, having caused himself and the other side to run up significant amounts of costs, and having exposed the defendant to the prospect of having to pay the CFA uplift and ATE premiums (which I am satisfied is a powerful threat to a defendant), should at the last minute do the equivalent of walking away from the action. I consider that all those factors, and the other matters referred to in this section, are good reasons for ruling that the costs be paid on the indemnity basis, and I so order.
Post script – some comments about the procedure adopted
    1. As the managing judge for this litigation I end this judgment by adding some additional remarks for the benefit of the parties in relation to WPSAC material.
    2. Virtually all cases in the very large number of phone hacking cases (both the claims against the present defendant and similar claims made against News Group International plc) have so far settled without a trial. The circumstances in which this particular case has come before the court are unusual. Nevertheless I have concerns about the approach to the WPSAC material in this case. If it were not for Mr Jordan’s final alternative of accepting the Part 36 offer, which meant that there could not in any event be a trial, the attempt to run the abuse and other arguments flowing from the application notice would have involved putting WPSAC material before me even though I was to be the trial judge. If I accept (which I do for present purposes, albeit with some surprise) that that acceptance was only decided on about an hour before the application notice was issued, then it follows that the application which was foreshadowed by Mr Sherborne at about 3pm was one which might not have contained such an element. If that is right then it would seem that the form of application which was contemplated was one which would not necessarily have brought the action to an end (unless, I suppose, Mr Jordan had pronounced a bottom line intention of discontinuance, which does not seem likely even if he might have decided on it) but must have involved putting prohibited material before me as trial judge. There was no suggestion from Mr Sherborne that he would be seeking to have his application put before a different judge; in fact the thrust of what he said was that I myself would be called on to deal with it before the trial commenced, and he accepted without qualification my request to have the material emailed to me as soon as the application was issued. When I taxed Mr Browne with this point he sought to suggest that the form of the application was still fluid and it might, for example, have proceeded on the footing of redactions. I find it impossible to see how that can have been a realistic possibility.
    3. That is a concerning prospect. If I had seen the material with a trial still in prospect I would probably have had to decline to take the trial if the application had failed (which in my view it was doomed to do). Since part of the point of having a managing judge in these cases is to have the same judge throughout then that central purpose would have been frustrated. The trial date might well have been lost. Since I do not know all the thought processes of those representing Mr Jordan I do not know for certain whether that would have happened, but nothing was said at the hearing before me which allayed my concerns. The parties should understand that if future cases involve putting WPSAC material before the court then care must be taken to ensure that I am the right judge to consider it.
Postscript
This judgment was delivered as if an oral judgment on Monday 24th July but by handing down a print of it without actually reading it out, reserving the right to make amendments as if it were an unapproved transcript. I therefore have the opportunity to add this postscript.
Over the preceding weekend the parties had prepared some more evidence which mutually waived privilege in without prejudice negotiations. It was sent to me by email but not read by me before finalising and delivering my judgment. I have now read it.
It is unnecessary to review all that evidence, and none of it would have caused me to revisit my conclusions had I seen it before I delivered my judgment. In fact it reinforces the views and findings set out in my judgment. The most important thing it does is fill in the gap in the narrative left by the without prejudice negotiations in June 2016. In my judgment above I observe that I had to be careful about drawing conclusions about non-engagement in settlement dealings because I knew there was a without prejudice meeting then but did not know its contents. I now do.
On 22nd June 2016 the parties met in a without prejudice meeting to discuss various cases including Mr Jordan’s. So far as Mr Jordan’s case is concerned his representatives offered to settle at £160,000 and the defendant offered £100,000. Two things emerge from that. The one of lesser importance is that Mr Jordan’s offer to settle at £160,000 makes it even odder that he should take £15,000 and costs burden immediately before trial. The more significant one is that it demonstrates that Mr Jordan could have settled at more than £90,000 in June 2016. That justifies the defendants in saying in correspondence that they would have agreed an increase in their £80,000 offer to £90,000 in July 2017 had Mr Jordan proposed it, and that as a result Mr Jordan should bear the costs since July. It makes it even more apparent that the costs since then were down to Mr Jordan, though of course my actual decision relates to the costs over the longer period going back to the September 2014 Part 36 offer.”